Thank You.... sorry thats -11 points.......230am in the morning rushing....not calculating properly and the cumulative win ratio is 4/15= 26.67%
I've been saying this to various of my colleagues for years. All of these TA indicators are calculated from past price data (even the immediately past is still past) and few who try to make use of these indicators ever bother to look behind them to see the math involved. They have literally no idea what aspect of the market behavior the indicator is measuring.
I agree. Everyone wants the fastest indicators and yet I select simple indicators and slower indicators. You ask most that do divergences based on an indicator can't tell you what price should be do and why. The "whys" and by looking at Price can offer other signals.
%K = (Current Close - Lowest Low)/(Highest High - Lowest Low) * 100 %D = 3-day SMA of %K Lowest Low = lowest low for the look-back period Highest High = highest high for the look-back period %K is multiplied by 100 to move the decimal point two places
That's fine and dandy, BUT do you know what this indicator should do on a 2 point move or a 2 tick move? The think about successful trading, if big brokerage not doing what you are doing, you lean on not making money, you just want to coat tail what the big money is doing.
This somehow reminds me of the often heard but apparently little heeded observation that the market does not care or even know about you, your position, your personal situation. Yes, that is the formula to calculate the value of %K, and yes the following is also correct: But in plain terms, what then does the value of %k represent in terms of price and what it is doing now and over the immediately past n periods? The math won't help you if you do not know what it is yielding.
I am having difficulty understanding the question, please could you elaborate in more simple terms? @zbestoch
I am looking to backtest this model on other instruments.... Which other instruments would you recommend? 6E? NQ? CL? @zbestoch @Handle123